Fairlie farmer steps down from board after serving maximum term allowable.

Fonterra is in a good position both from a financial and governance perspective, having learnt from its previous failures, retiring Fonterra director Leonie Guiney says.

“I’ll miss the privilege of contributing to steering something that was so important to outcomes for New Zealand farmers,” Guiney said.

“I’ve only had that privilege because you the farmers … have backed me and trusted my intent all the way, so thank you from the bottom of my heart.”

The Fairlie farmer has served the maximum nine-year term allowable on Fonterra’s board and stepped down along with independent director Clinton Dines at the co-operative’s annual meeting in New Plymouth.

They are not being replaced as Fonterra’s board reduces from 11 to nine people.

Chair Peter McBride thanked Guiney, saying the board “deeply” valued her contribution.

Guiney told the co-operative’s annual meeting that “it’s imperative that Fonterra has learnt where we went wrong in the past”.

“A focus on the appearance of value at the expense of actual value was at the root of a lot of our poor past outcomes.”

Added to that was a strategy that was misaligned to Fonterra’s core advantage, and the absence of risk-adjusted thinking in a lot of its investments made for some extremely expensive errors.

“Most businesses will make some poor decisions; good governance owns its own errors in a timely manner and that’s what minimises further damage to shareholders’ equity. Fonterra did not do that in the past. It was a governance failure we cannot repeat.”

She said the language CEO Miles Hurrell is using reassures her that he has a mature understanding of where Fonterra can extract value.

The balance sheet is better aligned to the exposure it will always have, and its risk appetite and strategy are better aligned with Fonterra’s strengths.

“The combination of listening while leading, financial discipline and strategic clarity has changed Fonterra.”

Guiney flagged one risk to the board and management – while recent performance has been very good, success is often the hardest thing to manage and Fonterra risks running aground if it starts considering itself individually responsible for good outcomes.

She encouraged the next generation of farmers to step up to lead in the future. Fonterra depends on business-savvy suppliers with skin in the game who are prepared to determine their own future.

New Zealand’s climate along with its sharemilking system and a co-operative that gives it an advantage in food service and ingredients innovation mean that Guiney is not worried about Fonterra’s future.

“I’m personally so very happy to be a New Zealand dairy farmer,” she said.

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